World

U.S.-Central America Deal On Trade

December 17, 2003 / 11:53 AM EST / AP

Overcoming a last-minute snag on textiles, the United States reached a free trade agreement on Wednesday with four Central American countries.

Negotiators reached agreement in all areas, including textiles and agriculture, according to a U.S. official, who spoke on condition of anonymity.

U.S. Trade Representative Robert Zoellick and the trade ministers from the four Central American Countries scheduled a news conference for later in the day to formally announce the breakthrough.

The countries who completed the negotiations were Guatemala, El Salvador, Nicaragua and Honduras.

A fifth nation, Costa Rica, abruptly left the talks on Tuesday complaining about excessive demands being made by the United States for the nation to open up its market to foreign competition in telecommunications and insurance.

However, U.S. officials expressed hope that the differences with Costa Rica can be resolved in coming weeks so that it will be included when the administration submits the Central American Free Trade Agreement, or CAFTA, to Congress early next year.

The breakthrough in textiles came after an all-night bargaining session. Some of the Latin American trade ministers had expressed pessimism that an agreement could be reached during this negotiating round and predicted that the talks would have to recess and start again in January.

The free trade deal covering Central America has stirred strong opposition among U.S. sugar cane and sugar beet farmers, who fear competition from lower-priced Central American sugar and from the U.S. textile industry, which also is concerned that the deal will open their beleaguered industry to even more foreign competition.

The deal, which will phase out virtually all trade barriers among the participating countries over the next decade, represents the sixth free trade deal the United States has achieved.

The North American Free Trade Agreement covers Canada and Mexico and the United States has individual free trade agreements with Israel, Jordan, Chile and Singapore.